The US government has to tackle the thorny issue of a huge budget deficit which is expected to swell to $1.9 trillion this year. Experts attribute this to financial aid to Ukraine.
According to estimates by the Congressional Budget Office (CBO), the US federal budget deficit will reach $1.9 trillion in 2024. Analysts predict that it could balloon to an impressive $2.8 trillion by 2034.
Experts have revised their February forecast for the US budget deficit. At that time, they projected an increase of $0.4 trillion (+27%), so the overall deficit for 2025–2034 could grow by $2.1 trillion (+10%). The US Congress acknowledged that the alarming budget deficit is due to recently enacted laws, specifically providing financial assistance to Ukraine, Israel, and countries in the Indo-Pacific region. The total amount of financial aid amounted to $95 billion.
US lawmakers forecast that the US national debt will expand to $50.7 trillion in 10 years, reaching 122% of the country's GDP. Congress is aware that large-scale federal borrowing was driven by the extraordinary measures taken in response to the COVID-19 pandemic and the 2017 tax cut that slashed the corporate tax rate from 35% to 21%.
Previously, Jennifer Sor, a columnist for Business Insider, noted that the growth of the US national debt jeopardizes the functioning of the global financial system. According to the analyst, the White House administration needs to slow down the borrowing pace to avoid negative consequences. To date, the US national debt stands at $34 trillion, and this is not the limit. "It will grow by $1 trillion every 100 days," Jennifer Sor warned. This arouses serious concerns among economists and market participants.
